LaBranche finds internal control problems

GregMorcroft

NEW YORK (CBS.MW) -- NYSE specialist firm LaBranche said it has found significant deficiencies in its internal controls related to financial reporting.

In a filing with the Securities and Exchange Commission, the company
LAB, +10.20%
said the trouble involves "our reliance on information provided by our existing outsourced relationships and the segregation of duties in reconciling third-party trading reports."

LaBranche discovered the problem during a review required under the Sarbanes-Oxley law passed in 2002.

The company said it is implementing new internal controls and monitoring the situation.

Separately Thursday, the Wall Street Journal reported that a number of specialists at the New York Stock Exchange resigned in recent days, in the latest fallout from a federal investigation into whether elite traders improperly profited at the expense of investors. See full story.

Specialists make markets for certain stocks by maintaining an inventory and being prepared to buy and sell shares as necessary to help maintain an orderly market.

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